The price of an electric vehicle depends largely on the cost of the batteries that power them, and those expenses are set to rapidly decline in the near future, according to a top Japanese business executive.

"The cost of battery is now dropping very rapidly, so in the near future, the cost of the electric vehicle will be comparable to the conventional cars," Masaki Sakuyama, president and CEO at Mitsubishi Electric, told CNBC.

Some day, he added, electric vehicle batteries may become cheaper to produce than combustion engines in traditional cars.

Mitsubishi Motors, which is part-owned by Nissan and part of the Renault-Nissan-Mitsubishi alliance, currently produces a hatchback electric car called the i-MiEV that runs on 330 volts, 16 kilowatt hour lithium-ion battery.

Elon Musk'sTesla still remains a leading player in the electric vehicle industry, but the space is becoming increasingly competitive. Major automakers like General Motors, Ford and Volkswagen are releasing electric models, and some are making massive investments.

Market watchers have said that stricter fuel efficiency requirements imposed on gasoline cars make them more expensive to make. By contrast, fuel savings and government incentives make electric cars cheaper. Technological advancements and increasing acceptance by customers and automakers are also contributing to rapid developments in the electric vehicle market.

But some limitations remain, including still-developing charging infrastructure and the relatively long time needed to charge a vehicle.

— CNBC's Robert Ferris contributed to this report.

Correction: This article was changed to reflect that Mitsubishi Motors is no longer the sister company of Mitsubishi Electric.